Corporate Services
Incorporation, registered office, company secretarial and nominee services. Our corporate team handles formation and ongoing maintenance of your Labuan trading company.
See corporate servicesActive business operations at 3% corporate tax on audited net profits, with full access to Malaysia's double tax agreement network. Incorporated under the Labuan Companies Act 1990 and taxed under LBATA 1990 for qualifying Labuan business activities.
A Labuan trading company is a Labuan entity that conducts active business activities such as buying and selling goods, providing services, IP licensing, factoring or leasing. It is incorporated under the Labuan Companies Act 1990 and taxed under the Labuan Business Activity Tax Act 1990 (LBATA), which provides a preferential 3% rate on net audited profits for qualifying activities.
To qualify for the 3% rate, the company must satisfy the economic substance requirements set by Labuan FSA, including a minimum number of full-time employees based in Labuan and minimum annual operating expenditure in Labuan. If substance requirements are not met, the company is taxed at 24% under standard Malaysian corporate tax rules. Audited financial statements are required annually regardless.
Labuan trading companies must be incorporated through a Labuan FSA licensed trust company such as Signature Trust, giving international operators a regulated, tax-efficient base from which to structure cross-border trade and service activities within Asia.
Speak to our teamBuy and sell goods between international parties using Labuan as the contracting entity. All currencies are accepted, with no foreign exchange restrictions on the Labuan side.
Hold intellectual property in Labuan and license it to subsidiaries in other countries, reducing effective tax on royalty income via DTA treatment where the counterparty jurisdiction permits.
Labuan-regulated factoring and leasing activities benefit from the 3% rate and are explicitly listed as qualifying Labuan business activities under the legislation.
Centralise procurement for a group of companies, or operate a consulting, management or software business through a single Labuan entity. The structure can also sponsor Employment Passes for directors and staff.
We review your intended activity, jurisdictions involved and counterparty profile, and confirm that the planned business qualifies as a Labuan business activity under LBATA.
We incorporate the Labuan company under the Labuan Companies Act 1990, provide the registered office and prepare the constitutional documents required for the activity.
We assist with putting in place the 2 full-time employees and minimum annual operating expenditure in Labuan, plus an operational office, so the 3% rate is preserved from day one.
We coordinate bookkeeping, audited financial statements, tax return filing and the annual FSA declaration, and document substance compliance on file each year.
Common questions about Labuan trading companies.
A Labuan trading company pays 3% tax on net audited profits, provided economic substance requirements are met. If substance requirements are not satisfied, the applicable rate rises to 24% under Malaysian tax rules.
Labuan business activities include trading in goods, providing services, IP licensing, factoring, leasing, and certain financial activities regulated by Labuan FSA. Since the 2020 LBATA amendments, Labuan companies may also transact with Malaysian residents.
For most activity categories, a Labuan trading company must maintain a minimum of 2 full-time employees based in Labuan and incur annual operating expenditure in Labuan at the threshold set by Labuan FSA. Certain financial services and specialised activities require higher thresholds. Failure to meet these requirements results in the company being taxed at 24% instead of 3%.
Yes. A Labuan trading company must prepare and file audited financial statements annually. The 3% tax rate is calculated on net audited profits. Unaudited accounts are not accepted for tax purposes.
Yes. A Labuan company can invoice international clients and receive payment in any currency without restriction. Labuan entities are exempt from Malaysian foreign exchange controls.
A registered address in Labuan is required for all Labuan companies. For substance compliance, a Labuan trading company must have an operational presence in Labuan, either a dedicated office or shared office space, to satisfy the annual expenditure and staffing requirements.
Speak with our team about your structure and substance plan, or browse our full range of corporate and fiduciary services.